In order to achieve long-lasting activity in a small hydrogen producer with a micro methanol reformer, we attempted to improve the performance of a coprecipitated palladium-based catalyst. Examination of the coprecipitation procedure revealed that a catalyst prepared by simultaneous dropping (SD) of a mixed solution of metal salts and a precipitant into distilled water showed superior catalytic activity to one prepared by dropping a precipitant (PD) into a mixed solution of metal salts. It was inferred that in the SD catalyst, the formation of small crystallites of ZnO and a large BET surface area improved catalytic activity. A Pd/ZnO catalyst with superior activity was obtained by subsequent optimization of Pd content and precipitation pH in the SD process. An increase in catalyst durability was achieved by adding a small amount of Si. The improvement in thermal durability due to the addition of Si results in a remarkable enhancement in the life of the Pd/ZnO catalyst.